· You must have decided what goods or services you are going to sell and who you are going to sell them to.

· You must have enough money to pay for the following –

a. Any equipment you need for the business;

b. Your first stock of products to sell or your first raw materials to start manufacturing;

c. The deposit on the premises you want to rent;

d. All other business expenses for the first few months (Aim for three months if possible).

· If you plan to work from home, you must make sure that there are no municipal regulations which will stop you doing so. For example, planning to open a boat building business in your front garden might not be allowed.

· You need to do a business course to help you understand how business works.

Working capital is money needed to fund the normal, day to day operations of your business. It ensures you have enough cash to pay your debts as they fall due and to buy the products or raw materials you need for the business.

· Seasonable products like women’s clothing – plan to sell out by the end of the season.

· Goods that sell all year – calculate how many you sell each week / month and plan accordingly. It is essential to make sure that your suppliers always carry stock of the products you want or, if not, how long it takes them to get new stock in.

Proper stock control is difficult in the beginning but gets easier as you go along and get more experienced.However, it is an essential part of your business and can often mean the difference between success and failure.

· You must be sure that you have sufficient working capital (See Glossary) to pay your staff on time each week or month.

· You have to draw up a contract for each member of staff stating basic pay, the type of work they will be doing and working hours. For all other conditions, such as overtime rates, annual and sick leave and firing procedures, it is best to use the Basic Conditions of Employment Act as your guide.

· You have to register as an employer with SARS (See Glossary) for UIF and PAYE.

· For casual labourers who work for less than 24 hours in a month, none of the above applies.

For running your business they are not important at all especially letterheads because, these days, most correspondence is done by email. But for marketing purposes a business card or a flyer to hand out to people telling them what you are doing and where to find you, is essential.

Because you have included a salary for yourself when calculating your overhead expenses and in cost of sales if you are a manufacturer, you should be able to pay yourself something right from the start. But, always make sure that you have enough money to buy your next lot of stock (goods to sell or raw materials to make products) before you pay yourself.

Work out how much the business can afford to pay you while still keeping enough money back to buy you next stock.

Later on as the business begins to grow and make bigger profits, find out what it would cost to replace yourself with someone who has the same skills as you. Use this figure as a guide when working out a salary for yourself.

Business Tip: Before you open your business, think through your business rules. One of them should be not to sell on credit. Have this rule printed and stick it up where the customers can see it. For example –

Business Tip: Before you open your business think through your business rules about matters like refunds and guarantees. Have these printed and, if possible, display them where customers can see them. For example –

If you are making perishable goods you will have to do this by testing your products to see how long they stay fresh. Ready-made foodstuffs, liked tinned goods, will already have sell-by dates provided by the manufacturers.

This depends on the type of business entity you have chosen for your business.

If you are a sole trader or you are in partnership with someone, the monthly salary paid to you by the business plus your share of the profit are added together and taxed at the same rate as an ordinary salary. If this figure is below R60000.00 in a year, no tax is payable.

Business Tip: When your business starts to grow, it would be wise to get advice from an accountant to help you with tax matters.

· Buying too much stock. For example, it is better to sell out and have to buy new products in the latest styles and colours than to be left with old stock at the end of a season.

Business Tip: Be careful when you are offered specially low prices if you take large quantities of a product. These deals sound very good at the time but you might find yourself left with unsold stock.

· Buying / making the wrong type of product because you have not assessed your customer’s needs correctly.

Your monthly financial statements will give you this information but an easy way to tell is to look at your bank balance. If you are successful there will be money in the bank unless you are taking out too much for your own use.

· You should have an informal marketing plan in place before you even open your business. Tell everyone you know (family, friends, neighbours) what you are doing, where you are doing it and when you will open.

· Satisfied customers are the best advertisement – do everything you can to provide excellent service.

· If you are offering a service like window cleaning, you need to have business cards or flyers ready to hand out and put in people’s letter boxes. As soon as you can afford it, place advertisements in the local community newspapers.

A more formal marketing plan can be put together when your business is more established and there is money available.

Keep an eye on what your competitors are doing. Keep up-to-date with what is happening in your type of business by talking to your suppliers and wholesalers. Improve the goods you are making and add that little bit extra to make them different.

· Home: When you first start up, keep enough money to buy your next lot of stock (goods to sell or raw materials to make products) and to pay for any expenses that are coming up. What is left can be taken as salary.

Once the business starts to grow and make bigger profits, pay yourself each month as though you were a member of staff. Whatever money you have left after paying yourself can be used to grow the business.

· Business: Once you have calculated what you need for working capital, you have to work as hard as you can to ensure that the business makes enough profit to supply the cash you need.